What Do Consumers Really Think About Online Auto Insurance Marketplaces?

With the proliferation of online auto insurance marketplaces an important part of the rise of insurtech companies across the country, Massachusetts-based Clearsurance, an independent review and rating platform for the insurance industry, decided to conduct a study as to how these online platforms are performing and what consumers really think of them.

The survey sought to gauge customer’s experience with these platform, given the fact that more than one of these marketplaces not only collect a consumer’s personal data but then often sells it to third-party sites – including insurance companies and agents.

Polling nearly 800 consumers nationwide, Clearsurance asked consumers who had used one of the current top ten marketplaces, a series of questions with respect to their experiences, their feelings about privacy, data collection as well as their overall satisfaction.

Michael Crowe

For Michael Crowe, CEO and co-founder of Clearsurance, the most surprising result of the study was the realization that many consumers were comfortable with the level of personal information that these companies were collecting.

While we were surprised to find a majority of consumers felt they were extremely or very clear on what would happen with their personal data, it’s interesting that consumers seem relatively comfortable with how online insurance marketplaces are using their personal data,”

“In an effort to fulfill our mission of providing a more transparent way for consumers to learn about and find the best insurance, we feel it’s an important time to begin allowing consumers to review and rate lead generation and price comparison sites.”

As a result, the company says that it will begin to roll out dedicated review and ratings pages for online insurance marketplaces over the summer.

So who are the top ten online auto insurance marketplaces?

With four out of the ten online auto insurance marketplaces headquartered here in the Greater Boston Area (Everquote, Insurify, Goji, and Insuramatch) Agency Checklists thought it would be of interest to our readers if we shared the results of that study with them. With that said, the following is a list of the top ten auto insurance marketplaces included in the current survey.

Marcy Updike

What agents and carriers can take away from the study

While the original focus of the study was focused on the general public’s perception of these marketplaces, there are certainly some take-aways from it for the insurance industry, and more specifically, carriers and agents.

With that in mind, Agency Checklists emailed the author of the study, Mary Updike, VP, Customer Insights and Analytics – ‎Clearsurance, the following questions to see what additional nuggets of wisdom she could share with us.

What prompted Clearsurance to do this study? What was it hoping to learn?

At Clearsurance, we care about a consumer’s entire experience when shopping for car, homeowners or renters insurance. Our aim with this study was to gain a better understanding of the online marketplace distribution channel to help us have a more complete picture of what a consumer goes through when they select this approach. We read reviews on sites like the Better Business Bureau and Google and saw some very angry consumers writing reviews on their experiences. As a professional market researcher, I understand there’s a bias toward only hearing from those that are either extremely happy or extremely angry. We wanted to take a more methodical approach to understanding how a broader group of consumers felt about their experiences with online marketplaces.

In terms of what we were hoping to learn…we wanted to understand how people felt about their experience. Did they walk away from their experience feeling satisfied? What were the pain points? We wanted a glimpse into this part of the shopping process so that we can help consumers make smarter, more informed decisions.

What was the most important thing that Clearsurance learned from the study?

What stood out the most for me was consumers who used these sites had an okay experience – they didn’t seem overly concerned with being contacted multiple times and didn’t worry about how their information was used. It is important to stress they were okay only to a point. By no means am I saying these sites have a free license to send an exorbitant number of emails or phone calls.

Consumers are using these sites to simply get quotes from multiple companies after filling out their information once. These sites are for those individuals just looking to get a low price or to make sure their current price is competitive. The number one reason for not purchasing through an online marketplace was the consumer didn’t get a price that was lower than what they currently had…or at least not low enough to justify the effort of switching carriers.

If you could identify three major takeaways from the study for carriers, what would they be?

Consumers aren’t as concerned as we thought they would be about how their information was used. We were surprised at the scores people gave regarding the clarity of how their information would be used, or whether or not they were comfortable with how their information was used.

The results were higher than we anticipated, so to understand the reason, we conducted some additional qualitative research. What we heard was surprising. Consumers gave a favorable score, and then would say things like…” I didn’t go looking for the information, but I’m sure it was on their website someplace,” “when you use a site like these you just expect your information will get shared.” For the most part, participants appeared willing to take a chance for the convenience of using an online marketplace.

The online marketplaces have done a great job of making the process of getting quotes easy. In fact, we found that about 80% of the participants rated their experience positively. Comments provided by participants focused on the relative ease of providing their information. The forms were easy to follow and did not require an unreasonable number of questions.

It is important to note that, while their experience using the site may have been positive, that does not guarantee that they will use them again in the future. While the sites make the process easy, a big driver of whether or not they would use them again hinged on the prices they were quoted. For those that bought a policy based on a quote provided, 55% have a strong likelihood to use again vs. only 24% who did not end up buying.

Consumers are accepting of receiving multiple emails and phone calls – to a point. This is where I have to be careful of my own biases. I was surprised at how willing consumers were to receive multiple phone calls and emails. In fact, it wasn’t until they received 4-5 phone calls did more than 50% of the participants say they no longer received the “right amount.” For emails, the number was 6-7. That told us that consumers were more willing to receive a higher number of emails than phone calls. It also told us at what point consumers started to feel enough is enough.

As a side note, the right number of quotes seemed to be 4-5 for those shopping through online marketplace. We recently completed a second phase of our shopping research and this one focused more on multiple purchasing methods including agents, going direct to carriers, and using an online marketplace. In that survey we found that individuals shopping direct or through an agent were satisfied receiving a fewer number of quotes.

Any information from the study that agents should know?

Agents were not a focus of this research; however, they were referenced from time to time. We have also done additional research, since this study, to understand how agents and online marketplaces can both fit in the shopping process.

Let’s take this survey specifically. We received comments from consumers stating that they shopped with an online marketplace and then took the rate to their agent to see if they could do better. What that tells us is that consumers still value the agent, but that the agent is being tested.

In the second shopping study I referenced above, we learned that 62% of those individuals who shopped using an agent recently, would use the agent as their primary next time they decide to shop. For online marketplaces, that number was 49%. That doesn’t mean that consumers aren’t going to use multiple methods, but it tells us agents are providing enough value that 62% of consumers planned to use them again.

What about the Massachusetts insurance industry in general? Any information specific to this market?

Unfortunately, we are not able to segment the results by state given our participation rates.

Do you have any predictions for 2018 with regards to online auto insurance platforms?

I have a few thoughts, but they are not based solely on this particular study. They are more from a collection of interviews and online surveys I’ve conducted recently. I don’t see the online marketplaces going away – I think they are filling a need and making it easier for car insurance to be commoditized. Currently, the main reason consumers don’t shop more often is because of the pain of the process. Online marketplaces make it easier for consumers to test the market. That doesn’t mean they are necessarily buying through the online marketplace, but they are looking to see what rates are available.

In my opinion, these sites make it easier to shop, primarily based on price. Other than brand recognition and price, there really isn’t another way to differentiate the companies on these marketplace platforms. I believe insurers need to find a way to address this potentially growing issue. We have some thoughts on this at Clearsurance and we’re testing them now. I hope I can come back and share more of our research in the near future.

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